MoE takes 'additional' measures with beneficial owner procedures

As part of these measures, the licensing authorities in all emirates and in the commercial free zones have been given the authority to impose administrative penalties and fines on non-complying establishments that fail to adhere to the ultimate beneficial owner requirements under the Cabinet Resolution (58) of 2020 regulating the Ultimate Beneficial Owner Procedure on or before June 30, 2021, in accordance with Cabinet Resolution No. (53) of 2021 on Administrative Penalties for Violators of Ultimate Beneficial Owner Procedures.

The latest move contributes to strengthening concerted efforts and integration of roles between federal and local authorities to ensure full compliance of the establishments, thus raising the level of transparency in the country’s business environment. In addition, it enhances the UAE’s efforts in developing the system of anti-money laundering and combating terrorism financing and supports its efforts at a global level in such regards. Additionally, it consolidates the UAE’s position as a competitive economic hub that follows the highest standards of integrity and transparency in the field of financial and commercial controls and confronting unhealthy practices in business activities.

In the same context, the Ministry revealed that the compliance rate of establishments with regard to providing ultimate beneficial owner data reached 62.1% so far. This includes 284,129 establishments in the country. The Ministry further confirmed its continuation of coordination with establishments’ licensing authorities, which include local economic departments and commercial free zone authorities, to ensure the readiness of their registration systems to provide the ultimate beneficial owner information and to ensure its quality and accuracy in accordance with the requirements of Cabinet Resolution No. 58 of 2020 on the regulation of the ultimate beneficial owner procedures.

The Ministry further indicated that it held more than 14 virtual workshops for the 38 licensing authorities to discuss challenges, exchange experiences and enhance awareness. In addition, it reviewed the distinguished results and experiences achieved by some licensing authorities in terms of awareness initiatives for establishments, creating online systems and educating employees who deal with the establishments with the aim of achieving the highest levels of compliance by the 513,632 establishments in the country, during the grace period that continues until the end of this June. The implementation of penalties for non-compliance will start as of July 1, 2021.

Furthermore, the Ministry indicated the readiness of the work teams assigned around the clock to take organizational and awareness measures to reach the target ratios, underlining its readiness to provide all technical support and guidance to achieve the highest levels of compliance by all establishments in the country before the end of this month. It further highlighted its keenness to address inquiries through its call center at 8001222 or to communicate with the economic departments and commercial free zones in the country.

The Ministry further confirmed the continuation of its awareness and regulation campaign for the business community. It called on the establishments to expedite the establishment of the ultimate beneficial owner register and sub mission of the relevant data, during the grace period that ends on June 30, in order to avoid being subjected to administrative penalties and fines stipulated in the decision. Penalties begin with a written warning, followed by a fine of AED 100,000 in the event of repetition and non-compliance and additional administrative penalties, including but not limited to, the suspension of the license for a period of one year or restrictions on the powers of the board of directors, services provided to violated establishments.

The Ministry explained that the submission of ultimate beneficial owner data is a necessary step to effectively disclose and reveal the complex structures related to the chain of ownership and its beneficial owner in licensed establishments in the UAE. This will raise the level of transparency in the economic environment and meet the country’s obligations towards relevant international organizations.

The Ministry of Economy also confirmed that the commitment of establishments to provide the ultimate beneficial owner data, in accordance with the relevant laws and decisions, will represent a big step forward in the development of governance and disclosure systems in the establishments registered in the UAE. It is noted that this step will benefit the business and investment sector in general, as it will enhance the country’s security and economic stability and will contribute to facilitating and attracting foreign direct investment and protect businesses from financial crimes.

The Ministry explained that targeted establishments are required to take 3 main steps: 1- creation of a special record of the ultimate beneficial owner information and keeping it within their documents, and presenting this record upon request from the relevant authorities and individuals, 2- Submission of an undertaking to establish the record and taking into account the accuracy of its data to the licensing authority to which each establishment is answerable to, 3- Inclusion of the ultimate beneficial owner’s information in the licensing authorities' systems through dedicated web pages on its official websites.